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ACQUISITIONS
12 Months Ended
Dec. 31, 2013
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]

3. ACQUISITIONS

Bogs

On March 2, 2011, the Company acquired 100% of the outstanding shares of The Combs Company (“Bogs”) from its former shareholders for $29.3 million in cash plus assumed debt of approximately $3.8 million and two contingent payments which are dependent on Bogs achieving certain performance measures. In accordance with the purchase agreement, $2.0 million of the cash portion of the purchase price was held back to be used to help satisfy any claims of indemnification by the Company. The holdback was paid in full to the former shareholders of Bogs in 2012. The acquisition of Bogs was funded with available cash and short-term borrowings under the Company’s borrowing facility.
At the acquisition date, the Company’s estimate of the fair value of the two contingent payments was approximately $9.8 million in aggregate. The first contingent payment was due in 2013 and was paid on March 28, 2013 in the amount of $1,270,000. The second payment is due in March 2016. For more information regarding the contingent payments, including an estimate of the fair value of the second payment as of December 31, 2013, see Note 11.
Bogs designs and markets boots, shoes, and sandals for men, women and children under the BOGS and Rafters brand names. Its products are sold across the agricultural, industrial, outdoor specialty, outdoor sport, lifestyle and fashion markets.
The acquisition of Bogs was accounted for as a business combination under ASC 805, Business Combinations (“ASC 805”). Under ASC 805, the total purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on their respective fair values at the acquisition date. The Company’s final allocation of the purchase price was as follows (dollars in thousands):
 
 
Cash
 
$
317
 
Accounts receivable
 
 
3,839
 
Inventory
 
 
2,932
 
Prepaid expenses
 
 
15
 
Property, plant and equipment, net
 
 
7
 
Goodwill
 
 
11,112
 
Trademark
 
 
22,000
 
Other intangible assets
 
 
3,700
 
Accounts payable
 
 
(454
Accrued liabilities
 
 
(561
  
 
$
42,907
 
Other intangible assets consist of customer relationships and a non-compete agreement. Goodwill reflects the excess purchase price over the fair value of net assets, and has been assigned to the Company’s wholesale segment. All of the goodwill is expected to be deductible for tax purposes. For more information on the intangible assets acquired, see Note 8.
The operating results of Bogs have been consolidated into the Company’s wholesale segment since the date of acquisition. Accordingly, the Company’s 2013 and 2012 results included Bogs operations for the entire year while 2011 only included Bogs operations from March 2 through December 31, 2011. Bogs wholesale net sales were $39.7 million in 2013, $36.4 million in 2012, and $28.0 million in 2011. There were also Bogs net sales included in the Company’s retail and other operating segments totaling $2.4 million in 2013 and $1.4 million in 2012.